President Biden last month signed an executive order intended to limit the clout of big business and enhance competitive prospects for small and mid-sized companies. The sweeping document — which includes 72 specific elements, among them provisions instructing the Food and Drug Administration to clear the way for prescription drug imports from Canada (a very bad idea) and over-the-counter sale of hearing aids (a good one) — is intended to serve as a blueprint for federal officials as they apply antitrust laws and implement other measures to protect small employers, workers and consumers.
After acknowledging that “America can’t succeed unless American business succeeds,” Biden went on to assert, “Capitalism without competition isn’t capitalism; it’s exploitation. Without healthy competition, big players can change and charge whatever they want and treat you however they want. And for too many Americans, that means accepting a bad deal for things that can’t go — you can’t go without.
“So, we know we’ve got a problem — a major problem. But we also have an incredible opportunity. We can bring back more competition to more of the country, helping entrepreneurs and small businesses get in the game, helping workers get a better deal, helping families save money every month.”
While most Americans would agree with the president that unbridled power in the hands of large corporations — or any other segment of society — is detrimental to the common good, regulators striving to maintain healthy competition in the marketplace should be careful to avoid the pitfall of unintended consequences. In trying to limit the potential of big companies to do damage, the administration must not curb their ability to serve customers and innovate.
Consider the experience of the last 17 months. As the severity of the threat posed by the SARS-CoV-2 virus became apparent in early 2019, the research-based biopharmaceutical industry was the first place many people turned to for answers. Frequently maligned, often unfairly, for the price of its products, the industry immediately went to work, mounting a full-court press to develop the means to treat and prevent COVID-19, a disease that after having already killed almost 4.2 million people around the world and rattled the global economy remains a looming threat.
Drug makers, quickly building on scientific advances made in recent decades, developed several COVID treatments: Gilead’s Veklury won full FDA approval and is now in use, and monoclonal antibodies from several companies are being administered to patients under emergency use authorization from the agency. Even more significant in the battle to end the pandemic are vaccines offered by Pfizer-BioNTech, Moderna and the Janssen division of Johnson & Johnson. All have proven safe and effective, providing high levels of protection against infection, serious illness and death.
To have compressed the vaccine development process — one that under normal circumstances can take a decade or more — into a period measured in months, not years, is an impressive feat, one for which the pharmaceutical industry deserves accolades. In evaluating that achievement, it should be remembered that the scale, range of resources and expertise available to the companies involved were important factors in making it possible to accomplish so much in such a short time.
A similar story unfolded when it came time to administer the COVID vaccines. Faced with the challenge of immunizing millions of Americans, federal and state officials enlisted the help of the nation’s pharmacy operators. Spearheaded by big chain retailers, which operate stores within five miles of 90% of the population, the industry administered more than 120 million doses as of July 15, according to the Centers for Disease Control and Prevention. Without the extensive network of stores owned by the likes of CVS Health, Walgreens Boots Alliance, Kroger and Walmart, it is doubtful that 50% of the population would be fully immunized at this point, and that COVID shots would be easily accessible to anyone in the U.S. who wants one.
The pivotal role that big corporations — CPG suppliers and food and drug distributors, as well as pharmaceutical manufacturers and retailers — have played in helping the nation get through what is hopefully the worst of the pandemic should not be taken lightly. Like its predecessor, the Biden administration is relying on the private sector to make essential contributions to the fight against COVID and the economic disruptions that it has unleashed. As he embarks on the path of regulatory reform, the president would be wise not to lose sight of the multiple benefits that stem from big business in both good times and bad.